The gradual rise in global temperatures due to anthropogenic greenhouse gas (CO2) emissions leads to severe climate change. Besides carbon capture and storage (CCS), another efficient solution to environmental issues and energy challenges is to convert CO2 into value-added chemicals. The urgent need for sustainable energy sources and the mitigation of greenhouse gas emissions has driven significant research into novel approaches for CO2 reduction. Among these, photocatalytic and photoelectrochemical (PEC) strategies hold a strong promise for converting CO2 into valuable chemicals, thereby offering a potential solution to both energy and environmental challenges. Significant research has been conducted on sustainable photocatalysts capable of reducing CO2 to value-added products. In this context, two-dimensional (2D) materials, owing to their unique optical, electrical, and structural properties, have emerged as versatile candidates for catalysing CO2 reduction. Different types of 2D materials, such as layered double hydroxides (LDHs), transition metal dichalcogenides (TMDs), MXenes, and covalent organic frameworks (COFs) are examined for their suitability in various CO2 conversion reactions. This review provides a comprehensive overview of recent advances in the utilization of 2D materials for photo-catalytic and PEC reduction of CO2 to value-added chemicals. We discuss the fundamental principles underlying CO2 reduction mechanisms, including the role of 2D materials in enhancing light absorption, charge separation, and catalytic activity. Moreover, we discuss how machine learning can be introduced for selecting materials for photocatalytic CO2 reduction. Challenges and opportunities associated with scaling up these technologies for practical applications are also addressed, along with prospects for future research directions. Overall, this review elucidates the significant progress made in leveraging 2D materials for photocatalytic and PEC reduction of CO2, underscoring their potential to support the shift to a carbon-neutral and sustainable energy economy.